Meeting Date:

September 22, 2008





Darby Fuerst,




General Manager

Line Item No.:     N/A


Prepared By:

Henrietta Stern

Cost Estimate:



General Counsel Approval:  Yes 

Committee Recommendation:  N/A

CEQA Compliance:  The MPWMD, as a Responsible Agency for this project, will rely on environmental documents previously approved by the County of Monterey for the Carmel Valley Ranch Subdivision (Mitigated Negative Declaration, Monterey County project file PLN020280, Resolution 06-366 approved on December 19, 2006).


SUMMARY:  The District Board will consider Application #20071212CVR-L4 (Exhibit 9-A) from applicants California American Water (CAW) and Carmel Valley Ranch, LLP, to amend the boundary of the CAW Water Distribution System (WDS) to annex the portion of Assessor’s Parcel Number (APN) 416-522-020 that is not already in the CAW service area to enable CAW water service to 12 residential lots previously approved by Monterey County.  This existing 218-acre parcel will be subdivided into 12 single-family residential lots and four open space areas within the Carmel Valley Ranch (CVR) Subdivision as approved by the Monterey County Board of Supervisors (BOS) on December 19, 2006 (Resolution 06-366 for PLN 020280).  APN 416-522-020 is currently bifurcated by the CAW service area boundary line, with approximately half of the parcel within the CAW service area and half outside, as shown in Exhibit 9-B.  When a final map is recorded for the approved Subdivision and creates separate new APNs for the described lots on the tentative map, nine of the 12 future lots (Lots 7, 8 and 10; portions of Lots 3-6, 9 and 11) would not be within the CAW service area as it currently exists.  All areas of the parcel must be in the CAW service area boundary in order for the District to issue water permits for a development to connect to the CAW system.  Hence, this application to amend the CAW boundary to annex the affected area is required.    


When the 12-lot subdivision was approved in December 2006, the County action included re-designation of water that had been previously earmarked for 25 residential lots in Area F of the CVR Specific Plan in 1997; these lots had been previously approved for development, but were no longer planned to be developed.  The County action also included rezoning of eleven existing legal residential lots of record in the Oakshire Subdivision area to open space.   The Monterey County Water Resources Agency (MCWRA) confirmed in January 2008 that the County “continues to hold 8.807 acre-feet per year” (AFY) from its existing MPWMD allocation of CAW water for the 12-lot CVR subdivision (Exhibit 9-C).   District records indicate there is roughly 12 AF remaining in the County’s CAW allocation.

The MPWMD serves as a Responsible Agency in this matter in compliance with the California Environmental Quality Act (CEQA), and relies on environmental documents, mitigation plan and certain conditions of approval adopted by the Monterey County BOS in December 2006.   The County’s Mitigated Negative Declaration concluded that there would be no increase in water use by the 12-lot subdivision due to the rezoning of other parcels and re-designation of water allotments from undeveloped residential lots to the new 12 lots as described above.  Also, the applicant has agreed to MPWMD WDS permit conditions and deed restrictions requiring monitoring, reporting and compliance with MPWMD enforcement actions to ensure the 8.807 AFY limit will not be exceeded for the 12 future lots when treated as a group.  Please refer to the “Background” and “Discussion” sections below for more information.


Documentation to substantiate the approved county project and the existing WDS and proposed water allocation is incorporated herein by reference.  All files associated with the application are available for review at the District office.  Under separate cover, the District Board has been provided a copy of the relevant CEQA documents adopted by the County.  Public notice of this hearing through a variety of means was provided in the manner required by the applicable District rules, as described below.


RECOMMENDATIONS:  District staff recommends that the Board take the following actions:


1.      Adopt the MPWMD Findings of Approval for Application #20071212CVR-L4 to Amend the CAW WDS (Exhibit 9-D) with specific reference to Finding #21, District compliance with CEQA as a Responsible Agency.


2.      Approve Application #20071212CVR-L4; authorize issuance of MPWMD Permit #M08-02-L4 with the 27 Conditions of Approval specified in Exhibit 9-E.  The Conditions of Approval include required conditions as specified in MPWMD Rule 22-D as well as special conditions for this project.  They also reiterate five adopted County conditions related to water supply, conservation, and reporting.


3.      Direct staff to file a Notice of Determination with the Monterey County Clerk in compliance with CEQA Guidelines Section 15096(i).   


BACKGROUND:  The CVR subdivision project has a lengthy history, including litigation.   The original project (PLN 020280) was approved by Monterey County in July 2004.  The Carmel Valley Ranch Specific Plan allowed up to 100 lots to be developed on the 218-acre APN 416-522-020 (Parcel A).  Litigation followed, project refinements occurred, and additional environmental documents were prepared.  Due to water limitations, the applicant proposed that fewer, but larger lots be approved for Parcel A (the new 12-lot subdivision) and that 11 lots in the Oakshire area be rezoned to an open space zoning district.  These changes were approved by Monterey County in December 2006, as described above. 


MPWMD Application #20071212CVR-L4 was submitted on December 12, 2007 and was found to be incomplete, as described in the letter from the District to the applicant on January 11, 2008.  In a letter dated January 28, 2008, the applicant provided the requested information about project maps, water availability from Monterey County’s allocation, and ensuring future water use remains within the amount specified by the County.  A letter from MCWRA (Exhibit 9-C) also confirmed availability of CAW water from the County’s allocation for this project.  District staff determined the application was complete in a letter dated February 27, 2008.


DISCUSSION:  Key application materials on file at the District office (hard copy or CD) include:


Ø      MPWMD Application #20071212CVR-L4 to Amend CAW WDS dated December 12, 2007;

Ø      Proposed annexation map;

Ø      Monterey County Water Resources Agency letter dated January 30, 2008 regarding 8.807 AFY available for the proposed 12-lot subdivision at Carmel Valley Ranch;

Ø      Monterey County revised Initial Study/Mitigated Negative Declaration dated September 27, 2006 and related attachments;

Ø      Monterey County Notice of Determination for CVR project filed with the County Clerk on December 22, 2006; 

Ø      Monterey County Resolution #06-366 approving the 12-lot subdivision on APN 416-522-020;

Ø      County Mitigation Monitoring Program associated with the 12-lot subdivision (PLN020280);

Ø      December 19, 2006 County Board of Supervisors staff report regarding the revised Initial Study and adoption of a Mitigated Negative Declaration;

Ø      County BOS hearing transcripts from December 19, 2006 meeting.


Approval of Application #20071212CVR-L4

The Findings of Approval (Exhibit 9-D) are based on evidence provided in the application materials, including supporting documents on file at the District office.  Staff believes the application meets the criteria and minimum standards for Approval set by District Rules 22-B and C.  Pertinent information includes the approved County environmental document, technical studies and reports, technical memoranda and maps, correspondence between MPWMD staff and the applicant, and previous approvals by other governmental entities.  MPWMD approval of the application, as conditioned, is not anticipated to result in a further effect to the Carmel River, the Carmel Valley Alluvial Aquifer (CVAA), and other Sensitive Environmental Resources beyond what has already been approved by Monterey County in 2006.  The previously approved CVR project already contributes to the cumulative effect (as defined by CEQA Section 15355) of CAW and non-CAW water extractions on the Carmel River and CVAA.  Notably, CAW diversions from the CVAA, including service to the 12-lot CVR subdivision, are controlled by the State Water Resources Control Board (SWRCB) and other regulatory agencies.  


The Conditions of Approval (Exhibit 9-E) proposed for Permit #M08-02-L4 are consistent with MPWMD Rule 22-D governing approval of water distribution systems.  Conditions #1-4 define the Permitted System, including designation of up to 8.807 AFY of metered CAW sales to serve the 12 future lots; the 8.807 AFY would be deducted from the County of Monterey’s water allocation.  Service to the 12 lots represents an increase of 12 connections in the CAW system as compared to what physically exists in September 2008, but is not an increase over what had been designated in 2006 pursuant to County approvals.  The CAW connections for the 12 new lots are offset by the termination of 11 connections that had been designated for the Oakshire subdivision area plus one connection associated with potential development of Parcel A had it been treated as a single parcel.   Importantly, Conditions #1-4 do not change the total CAW system production limit of 14,789 AFY, as currently set by the SWRCB Order 95-10 limit of 11,285 AFY from the Carmel River and 3,504 AFY from the Seaside Groundwater Basin adjudication decision.


Conditions #5-23 reflect standard MPWMD mandatory conditions, including water quality, metering and annual reporting, conservation, required Indemnification Agreement, fee payments, timely notice of pending or actual changes to the system, and other required elements. Other Conditions of Approval (Conditions #24-25) address water rights and the Endangered Species Act; these are not required by District rules, but are included in all MPWMD WDS permits.  It is notable that the SWRCB is in the process of finalizing a Cease and Desist Order against CAW, but it is unknown at this time what the final Order will require, and how the Order may affect the ability of CAW to serve lots that are not yet hooked up to the CAW system. 


Special Condition #26 addresses the need to ensure that no more than 8.807 AFY is used on the 12 lots as a group, given the sensitivity of the CVAA and pending actions that affect it.   The proposed District condition includes a deed restriction to be placed on each of the 12 future parcels advising owners of the water use restrictions, the additional monitoring and reporting of metered sales to MPWMD to ascertain that no more than 8.807 AFY is used; and the authority to enforce actions to reduce water use if more than 8.807 AFY is used in any one year.  This condition also reiterates five County conditions relating to water supply. The applicant’s attorney in a letter dated January 28, 2008 (Exhibit 9-F), has agreed to such restrictions.  The letter also notes that the December 2006 County conditions of approval already mandate a deed restriction requiring water-saving fixtures, drought tolerant landscaping and water efficient irrigation (County Conditions 33 and 34); water balance analysis of pre-and post-development water use (Condition 35); and proof of water availability by County and MPWMD staff (Condition 59).


Special Condition #27 requires that a copy of California Public Utilities Commission (CPUC) Confirmation of the annexation be provided to the District.  Special Condition #28 mandates that the District be provided copies of all pertinent water monitoring reports associated with the 12 lots, and have physical access to each of the 12 lots for onsite inspections, if needed.


In an e-mail dated September 15, 2008, the applicant’s attorney expressed concerns about certain language in the standard Indemnification Agreement that is required as a condition of permit approval (Attachment 2 to Exhibit 9-E).  Staff has asked the attorney to discuss the matter with District Counsel, and it is not known at this writing whether the concerns have been resolved.


MPWMD CEQA Compliance

The District Board action must comply with CEQA as well as MPWMD regulations.  In the review of this application, MPWMD has followed those guidelines adopted by the State of California and published in the California Administrative Code, Title 14, Section 15000, et seq.  Specifically, the MPWMD, as a Responsible Agency under CEQA for this action, has complied with Guidelines Section 15096.  The MPWMD has considered the approved environmental documents previously certified and/or adopted by the County of Monterey (Carmel Valley Ranch 12-lot residential subdivision revised Initial Study/Mitigated Negative Declaration dated September 27, 2006, Monterey County project file PLN020280, Resolution 06-366 adopted December 19, 2006).


The Initial Study/Mitigated Negative Declaration (IS/MND) contains a detailed review of how water from previously approved, but undeveloped, projects within CVR is available for re-allocation to the 12-lot subdivision.  The IS/MND concluded that development of the project will result in no net increase of water use, and is consistent with both MPWMD Ordinance No. 70 and County approval for water dated October 11, 1994.  Therefore, there would not be an increase in water use as there is no addition to the total water use approved for the allowed development under the Carmel Valley Ranch Specific Plan. At the request of District staff, MCWRA re-confirmed that 8.807 AFY of water is designated for the CVR project in a letter dated January 30, 2008 (Exhibit 9-C).



Public notice has been provided no later than 10 days prior to this public hearing in several ways, including: (1) mailed notices to property owners within 300 feet of the subject parcel; (2) posted notices at the project site; (3) posted notice at the MPWMD office; (4) notice of the public hearing to recipients of District agendas for the September 22, 2008 meeting; (5) standard agenda/hearing notices to local media; and (6) posting of the September 22, 2008 agenda and agenda materials on the District website.



9-A      Application #20071212CVR to amend the CAW WDS (without attachments)

9–B     Map of proposed CAW service area

9–C     MCWRA letter dated January 30, 2008 confirming available CAW water

9–D     Findings of Approval for Application #20071212CVR

9–E      Conditions of Approval for Application #20071212CVR

9–F      Letter from Tony Lombardo dated January 28, 2008 regarding permit conditions